News

I was clued into a great read from our good friend, Darren Herman of Varick Media Management and Media Kitchen from his blog about an article on AdExchanger entitled Disintermediation Opportunity.

The context of the conversation centers around the willingness, technological know-how, and scalability of advertising agecnies to break free of their dependence on “advertising networks.”

In MediaPost, Michael Katz of interClick noted, “There are many more intermediaries (Ad Networks, Inventory and Data Exchanges, Remnant inventory Management) becoming involved in the supply chain. I don’t know if it’s a bad thing, but rather born out of necessity. It will be interesting over the next year to see at what point as you continue to add intermediaries will disintermediation start to occur.”

It’s funny you should mention disintermediation, Michael. Some think it’s already rolling.

During the OMMA event, Darren Herman of Varick Media Management and Media Kitchen fame twittered “ed montes (Regional Manager, Havas) just pissed off every ad network in the room.” And then added, “I totally agree with him as he said that ad agencies are acting as tech players now and disintermediating.”

From our perspective, distermediation makes great sense for the media agency model. But, we don’t believe many of today’s agencies are going to be able to pull it off with their anachronistic, walled garden mentality.

The growing number of tools of the exchange for advertisers, publishers and, ultimately, traders, creates an opportunity for an agency to provide expertise across the exchange’s range of tools which cannot only affect efficient, ROI-generating strategies for clients but also for their own book. All new revs for the savvy agency!

The trip wire for certain agencies remains a culture of entitlement and a self-proclaimed need to protect data on behalf of their clients. The inevitable success of the ad exchange model will be based on the free flow of data between all sides of the exchange as opposed to the type of false disintermediation which may tend toward proprietary data grabs.

Social Media – A Forerunner of Ad Exchanges

Much like social media’s success in empowering the individual to create his or her own content with the people, places and brands that only matter to THAT individual, the ad exchange model will flourish as disparate parts of data can be freely coalesced by any exchange member and provide transparent insight into the true value of media.

This “true value” will result in vast new quantities of premium inventory and bring the exchange out of the perceived shadows of the remnant world and into the rarified air which approaches every marketers wet dream of one-to-one marketing as buyer and seller know what they are giving and getting – and the consumer receives more relevant advertising.

In my words: What does this mean? Simply put buy using data to target media smartly and efficiently, online advertising inventory value increases. The question is who will have the ability to harness the concept, for the greatest benefit of the marketers? Will it be today’s ad networks, or publishers, or ad technology companies, or today’s agencies, or the marketers themselves? I agree that the process is underway, and I humbly submit that you will see examples of success from each type of company in the ad ecosystem.

Tags: Advertising, darren herman, Lotame, Marketing and Advertising, Media Kitchen, Michael Katz, Social Media, varick media

This entry was posted on Monday, March 9th, 2009 at 9:15 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.